PSC - AGM Information 2016 | FinancialReports.eu

TSE: 2855

2016 General Shareholders’ Meeting

Meeting Agenda

Jun. 14, 2016 at 9:00am

B1, No. 8, Dongxing Rd., Taipei City, Taiwan, R.O.C.

Translation – In case of any discrepancy between the Chinese and English versions, the Chinese version shall prevail.

Table of Contents

Page


1	Meeting Agenda	3
2	Items for Discussion(1)	4
3	Report Items	5
4	Items to be Adopted	8
5	Items for Discussion(2)	9
6	Extraordinary Motions	10
7	Meeting Adjourned	10

Appendixes

I	Comparison table of Amendments to ” Articles of Incorporation”	11
II	2015 Business Report	13
III	2015 Audit Committee's Review Report	16
IV	Comparison table of Amendments to “Ethical Corporate Management Best Principles”	17
V	2015 Financial Statements and Consolidated Financial Statements	21
VI	2015 Earnings Distribution Proposal	40
VII	Comparison table of Amendments to ” Operating Procedures for Endorsement and Guarantee”	41
VIII	Comparison table of Amendments to ” Procedures for Engaging in Derivatives Trading”	45
IX	Rules and Procedures of Shareholders’ Meeting	49
X	Articles of Incorporation	58
XI	The Impact of the Stock Dividend Issuance on Business Performance, EPS and Shareholders Return Rate	64
XII	Shareholdings of Directors	65

Agenda for the 2016 General Shareholders’ Meeting
Meeting called to order (Report on the total number of shareholders and shareholder representatives in attendance)
Opening Remarks from the Chairman
Items for Discussion(1)
Amendment to the “Articles of Incorporation”
Report Items
2015 Business Report
2015 Audit Committee's Review Report
2015 Remuneration of Employees and Directors
The Result of Treasury Share Repurchase Program
Amendment to the “Ethical Corporate Management Best Principles”

(5) Items to be Adopted

2015 Consolidated Financial Statement
2015 Earnings Distribution Proposal

(6) Items for Discussion

Amendment to the “Operating Procedures for Endorsement and Guarantee.”
The proposal of issuance of new shares through capitalization of retained earnings
Amendment to “Procedures for Engaging in Derivatives Trading”

(7) Extraordinary Motions

(8) Meeting Adjourned

Items for Discussion(1)

Item 1 (Proposed by the Board of Directors)

Topic: To amend the” Articles of Incorporation” in accordance with the amendment of the Company Act. Please proceed to vote.

Explanation:

To amend the Paragraph 23, 23-1,and 26 of the” Articles of Incorporation” in accordance with the amendments of article 235-1, 235,and 240 of the Company Act.
The major amendments: In an effort to encourage employees and management, the Company will distribute compensation to employees and the Directors from pre-tax profits. Where the company has pre-tax profits, the total value of funds to be distributed among employees shall not be less than 1.6% of pre-tax profits; while the total value of funds to be distributed among the Directors shall not be more than 2% of pre-tax profits. If the company has losses carried forward, compensation should only be paid to employees and Directors after funds have been set aside as reserve for such losses.
For the comparison table, please see Appendix I (page 11 )
Report Items

(1) 2015 Business Report

Explanation: The Company’s Business Report for 2015, please see

Appendix II (page13-15)

(2) 2015 Audit Committee's Review Report

Explanatory: For 2015 Audit Committee's Review Report, please see Appendix III (page 16)

(3) 2015 Remuneration of Employees and Directors

Explanation:

1. Comply with the Ordinance No. 10402413890(June 11, 2015) and the Ordinance No. 10402427800(October 15, 2015) issued by the Ministry of Economic Affair.
In accordance with Article 23 of the Company’s bylaws approved by the resolution of shareholder’s meeting, the Company will distribute compensation to employees and the Directors from pre-tax profits. Where the company has pre-tax profits, the total value of funds to be distributed among employees shall not be less than 1.6% of pre-tax profits; while the total value of funds to be distributed among the Directors shall not be more than 2% of pre-tax profits. If the company has losses carried forward, compensation should only be paid to employees and Directors after funds have been set aside as reserve for such losses.
The proposal of 2015 Remuneration of Employees and Directors has been approved by the the second meeting of the 3th Remuneration Committee and the 5th meeting of 10th Board of Directors. It is proposed that a total of NT$22,292,609 to be distributed to employees and NT$22,292,609 to be distributed to Directors in accordance with the allocation rules of the10th Board of Directors. The above mentioned compensation will be in cash.
Compensation should only base on the approval of the shareholders’ meeting.

(4) The Result of Treasury Share Repurchase Program

Explanation: The implementation of shares buyback is as follows:

The Reported information of Shares Buyback


Term of buyback	10 th	11th
(1)Purpose of the buyback	cancellation of shares	cancellation of shares
(2)Limited monetary amount of total buyback	NT$ 750,800,000	NT$576,300,000
(3)Scheduled number of shares buyback	40,000,000 shares	30,000,000 shares
(4)Scheduled period for the buyback	2015/09/18~2015/11/17	2016/01/28~2016/3/25
(5)Scheduled buyback price range for each share	NT$9.03-18.77	NT$9.03-18.77

The Implementation of Shares Buyback


Term of buyback	10 th	11th
(1)Number of shares bought back	19,323,000 shares	8,548,000 shares
(2)Total monetary amount of bought back	NT$ 278,025,673	NT$114,097,699
(3)Average price for each bought back share	NT$14.39	NT$13.35
(4)Cumulative number of shares held	19,323,000 shares	8,548,000 shares
(5)Cumulative number of shares bought back as a percentage of total outstanding shares	1.46 %	0.66 %

Capital Reduction:
In accordance with the article 28-2, paragraph 1, subparagraph 3of the Securities and Exchange Act, amendment registration shall be effected within six months from the date of buyback.
Details are as follows:


Term of buyback	10 th	11th
(1)Date and Ordinance No. of the Authority’s approval	Nov. 23, 2015 FSC Ordinance No. 1030020595	March 31, 2016 FSC Ordinance No. 1050010487
(2) Date of Board resolution	Jan.23, 2016 the 5th meeting of 10th Board of Directors	May 5, 2016 the 7th meeting of 10th Board of Directors
(3). Record date for capital reduction	Feb.19, 2016	May 12, 2016
(4) Amount of the capital reduction	NT$ 193,230,000	NT$ 12,952,480,540
(5) Paid in capital after the capital reduction	NT$13,037,960,540	NT$ 12,952,480,540

(5) Amendment to the “Ethical Corporate Management BestPrinciples”

Explanation:

As our Company has established the Audit Committee to replace Supervisors, the Ethical Corporate Management Best Principles shall be amended accordingly.
The major amendments are to amend article 2,8,9,10,11,12,13,14,16 and 19 to delete the relevant rules of Supervisors.
For the comparison table of amendments to“Ethical Corporate Management Best Principles”, please see Appendix IV (page17-20)
Items to be Adopted
Motion 1 (proposed by the Board of Directors)

Topic: Adoption of the 2015 consolidated financial statements

Explanation:

(1) The 2015 consolidated financial statements have already been successfully audited by CPA Lin Se-Kai and CPA Huang Gin-Jei of PricewaterhouseCoopers Taiwan.

(2). The Business Report, the financial statements, and the consolidated financial statements have been reviewed by the Audit Committee and approved by the Board of Directors

(3) For the Business Report, the financial statements, and the consolidated financial statements, please see Appendix II (page13-15) and Appendix V (page21-39).

Motion 2 (Proposed by the Board of Directors)

Topic: Adoption of the Proposal for the 2015 earnings distribution

Explanation:

(1) The proposal for distribution of 2015 earnings are prepared In accordance with regulations and the Company’s Articles of Incorporation. Please refer to the 2015 Earnings Distribution Proposal as Appendix VI (Page 40).

(2) After first being decreased by $8,948,098 as a result of actuarial losses on defined benefit plans, and then setting aside special reserve and legal reserve, unappropriated earnings available for distribution for 2015 is $673,938,400. Proposed cash dividend is $260,759,211, which is equivalent to $0.2 per share. Proposed stock dividend is $404,176,780, which is equivalent to $0.31 per share. Upon the approval of Shareholders' Meeting, it is proposed that the Board of Directors be authorized to resolve the ex-dividend date and record date of a capital increase.

(3) In the event that the shares outstanding changes, it is proposed that the the Board of Directors be authorized to adjust the amount per share to be distributed to shareholders based on the number of actual shares outstanding on the record date for distribution. Dividends of less than $1 shall be transferred to the Company's Employee Benefit Council.

5. Items for Discussion（2）

Item 1 (Proposed by the Board of Directors)

Topic: Amendments to the “Operating Procedures for Endorsement and Guarantee”.

Explanation:

(1) In accordance with the Ordinance No. 10400253551 ,and Ordinance No. 1040041400 issued by the FSC on Aug.7, 2015 and Nov.19, 2015, the Operating Procedures for Endorsement and Guarantee should be amended.

(2) For the comparison table of amendments to” Operating Procedures for Endorsement and Guarantee”, please see Appendix VII (page 41-44).

Item 2 (Proposed by the Board of Directors)

Topic: The proposal of issuance of new shares through capitalization of retained earnings.

Explanation:

(1) In order to strengthen the Company’s operating capital position, it is proposed to distribute stock dividend $404,176,780, which is equivalent to $0.31 per share with each share to have a par value of NT$10.

(2) For shareholders receiving less than 1 newly issued share, they should apply to the company’s shareholder services department within 5 days of the capital increase date of record, and shareholders who fail to register before that date will receive a discounted cash payment. Cash payments will be rounded down to the nearest NT$1, with any fractional share being allocated to the Company’s Employee Benefit Council with par value.

(3) Company share buybacks, treasury share transfers, and cancellation of shares may alter the total number of outstanding company shares and thereby affect the ratio by which earnings are distributed to shareholders. The Chairman of the Board shall be authorized to adjust the distribution ratios approved in the General Shareholder Meeting so as to accurately reflect the total number of outstanding shares as of the capital increase date of record.

(4) It is proposed that the Board of Directors be authorized to set distribution events, such as the ex-dividend and capital increase record date, after approval by a shareholders’ meeting and after approval by the competent authority. In case of changes of the regulation or of competent authority’s order, the Board of Directors shall be authorized to handle all the relevant matters.

Item 3 (Proposed by the Board of Directors)

Topic: Amendment to “Procedures for Engaging in Derivatives Trading”

Explanation:

(1) These Procedures are adopted in accordance with the article 36 and 37 of the Securities and Exchange Act and the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” published by the Financial Supervisory Commission. Procedures for Engaging in Derivatives Trading shall be submitted to the shareholders' meeting for approval.

(2) Responding to the restructuring of the Risk Control Department, amendment to “Procedures for Engaging in Derivatives Trading” is necessary correspond to reality.

(3) For comparison table, please see Appendix VIII (page 45-48 )

6. Extraordinary Motions

7. Meeting Adjourned

Appendixes

Appendix I

Comparison table of Amendments to” Articles of Incorporation”


Article	Amendment	Original Articles
Article 23	In an effort to encourage employees and management, the Company will distribute compensation to employees and the Directors from pre-tax profits. Where the company has pre-tax profits, the total value of funds to be distributed among employees shall not be less than 1.6% of pre-tax profits; while the total value of funds to be distributed among the Directors shall not be more than 2% of pre-tax profits. If the company has losses carried forward, compensation should only be paid to employees and Directors after funds have been set aside as reserve for such losses. Employees’ compensation should be paid in the form of cash or company shares. A resolution regarding compensation to be distributed should be passed at a Board of Director’s meeting by a majority vote at a meeting attending by two-thirds or more of the Directors, after which the results should be reported to the shareholders. Only those individuals meeting the specific criteria of employees shall be considered employees for the purposes of the employees’ compensation distributions.	From the profit earned by the Company upon annual account closing, the sum to pay all taxes and make up previous loss, if any, shall be first withheld, then 10% for legal reserves, 20% as special reserves, set aside or reverse special reserves in accordance with other laws or regulations and together with retained earnings, shall be determined by the shareholders’ meeting and be duly allocated at the following ratios: 1. Remuneration to directors 3% 2. Bonus to employees 2% 3. Bonus to shareholders 95% The profit may be retained and not allocated if the total allocable profit is not up to 5% of the paid-in capital.
Article 23-1	If there are surplus profits after the closing of the books in a given fiscal year, then, after paying applicable taxes and making up losses from previous years, the company should set aside 10% of remaining profits as legal reserve, 20% as special reserve, and any other reserves as required by applicable laws or regulations, and, if any profits still remain, the board of directors shall put forth a motion to the shareholders for distribution of the remaining profits to shareholders. In the event that the remaining profits represent less than 5% of the value of the company’s paid-in capital, then no such distribution is necessary. The Company’s dividend policy should be based on the long-term financial structure and stability of the Company so as to allow for continued growth, which creates the best value for shareholders. The dividend distribution in a given year shall not be less than 70% of the surplus profits available for distribution. Stock dividends should not account for less than 10% of the total dividend distributed, and cash shall not account for more than 50% of the total dividend distributed. However, the Company may take into consideration the actual status of the Company’s operations and future capital needs when determining an appropriate ratio of cash and shares for the dividend distribution.	The Company takes a policy of dividend payment to maintain sound long-term financial structure and stabilize continual growth to maximize benefits to shareholders, in the following manners: 1. The total amount of dividend shall not be below 70% of the allocable profit as per the preceding article. 2. Out of the dividend which can be allocated according to the preceding article, stock dividend shall not be below 50% and cash dividend shall not exceed 50%. 3. The dividend may be allocated in stock dividend in full when the Company is in major investment or development policies.
Article 26	These Articles were duly established on November 26, 1988 and the first amendment was approved on December 28, 1988; ------------; the twenty sixth amendment on June 14, 2016.	These Articles were duly established on November 26, 1988 and the first amendment was approved on December 28, 1988; ------------; the twenty fifth amendment on June 18, 2015.

Appendix II

2015 Operating Report

Macro Environment and Business Strategy

Looking back on 2015, we saw a stable global economy at the start of the year, with monetary policies loose, the main TWSE index rising, reaching its peak of 10,014 points in April. In the second half of the year, the unresolved Greek debt crisis, the RMB devaluation, weakening oil prices, and rising US interest rates, all worked to drag the Taiwan markets down from a high for the year of 10,014, to a low for the year of 7,203. The TWSE index ended 2014 at 9,307, and then ended 2015 down 969 points to close at 8,388, for a drop 10.41% for the year. Accordingly, we were extra vigilant with all of our businesses in 2015, and, by making stable investments and controlling risk, we were able to maintain stable profitability despite the challenges in the markets.

Execution and the Outcome

Looking at our brokerage business, 2015 saw large swings in the market trading volumes and a drop in margin trading. Our average market share for the year was 3.26%, ranking us 8th among the top-11 domestic brokerage firms. Going forward, we will continue to strictly control business risks, maintain strong creditworthiness, provide exceptional service and diversified products, and strengthen our client base, all in an effort to pursue stable growth and market share.

Looking at our underwriting business, we handled a total of 39 deals in 2015, ranking us 10th within the industry. In choosing the deals we work on to raise capital or to list, we look at the industry and the credit risks involved. Going forward we will continue to monitor risk controls for our positions, maintain a top-notch team, pursue quality clients, and expand our business.

Looking at our proprietary trading business, 2015 saw large swings in the market, from a high of 10,014 points in the first half of the year, to a low of 7,203 in the second half of the year, for a range of 2,811 points, ending the year down 10.41%. Despite this, our proprietary trading division was able to identify quality investment targets, to follow international economic trends and thereby control risks, to diversify investments internationally and spread out risk, which resulted in trading performance that beat the TWSE index and produced stable profits for the company.

Looking at our fixed income business, the Taiwan bond market has been in a bull market, which has produced steady profits. But, overseas, with central banks in various countries lowering interest rates, trading in foreign bonds has become much trickier. Going forward, we will continue to monitor the markets for arbitrage opportunities and will capitalize on macroeconomic and policy forces and invest in bonds denominated in various currencies. We will continue to monitor larger trends so as to turn in stable profits.

Looking at our derivatives products business, we are 8th in the industry in terms of the number of warrants issued and the total value of warrants issued. For our warrant business, we focus on identifying solid market making opportunities and on building a professional brand image, and thereby produce stable revenues. Going forward, we will continue to issue quality warrant products. As for our futures and options business, we will continue to trade a more diverse range of products and strategies so as to better reduce our portfolio risk, we will enhance risk control measures, and will bolster overall profitability.

Profitability Analysis and Business Income, Expenses, and Targets

In the first half of 2015, monetary policies around the world were loose, allowing the Taiwan index to surge past 10,000 points. But, the second half of the year saw global markets rocked by the People’s Bank of China suddenly devaluing the RMB without warning. Trading volumes also shrank, with average daily trading volumes for 2015 coming in at NT$116.9billion, which was down from the average from 2014 of NT$120.1billion, or down 2.66%. In 2015, our professional team was able to utilize its solid trading experience, professional judgment, and vigilant risk controls, to produce stable profits. Total revenues for the year came in at NT$3.511 billion. Costs and expenses came in at NT$3.445 billion, non-operating income was NT$1.004 billion, and net income was NT$957 million, or EPS of 0.72, ranking us 6th among the top-11 securities firms. Our ROA came in at 2.11%, ROE was 4.18%, and we achieved 94.66% of our full-year target.

Future Directions

In 2016, the US is entering a cycle of rising interest rates, while Europe and Japan are continuing their loose economic policies. The global economy will continue to experience loose capital. The PRC economy will continue to undergo readjustment. Crude oil will face over-supply, which will continue to impact the markets. Indeed, financial markets will face a number of uncertainties in the coming year and we will need to respond cautiously. Going forward, President will keep its finger on the pulse of the markets; will continue to pursue stable, long-term profits; will diversify its investments around the world; and will strengthen its risk control measures. Our management team will leverage all of the company’s strengths to provide quality products and services and use stable operating strategies to produce stable profitability, thereby creating value for the company and for shareholders.

Chairman of the Board President Head of Accounting Dept.

LIN,CHUNG-SHEN Lin, Kuan-Chen An, Chi-Li

APPENDIX III

APPENDIX IV

Comparison table of Amendments to” Ethical Corporate Management Best Practice Principles”


Article	Amendment	Original Articles
Article 2	(Prohibited Unethical Behavior) The Company’s directors, managers, employees, and any other person with actual controlling authority (hereafter, “Controlling Persons”), when conducting the business of the Company, shall not, either directly or indirectly, provide, promise, request, or receive any improper benefits, or act in a manner that is unethical, illegal, or contrary to his/her fiduciary duties (hereafter, “Unethical Behavior”). Counterparties to the abovementioned Unethical Behavior include government officials; candidates running for political office; political parties or political party members; or the directors, supervisors, managers, employees, or Controlling Persons of any public or private company; or anyone else with a conflict of interest.	(Prohibited Unethical Behavior) The Company’s directors, supervisors, managers, employees, and any other person with actual controlling authority (hereafter, “Controlling Persons”), when conducting the business of the Company, shall not, either directly or indirectly, provide, promise, request, or receive any improper benefits, or act in a manner that is unethical, illegal, or contrary to his/her fiduciary duties (hereafter, “Unethical Behavior”). Counterparties to the abovementioned Unethical Behavior include government officials; candidates running for political office; political parties or political party members; or the directors, supervisors, managers, employees, or Controlling Persons of any public or private company; or anyone else with a conflict of interest.
Article 8	(Offering and Accepting Bribes) When conducting the business of the Company, the directors, managers, employees, and Controlling Persons shall not, either directly or indirectly, provide, promise, request, or receive any improper benefits, including offering discounts, commissions, middle-man fees, or using a third party customers, agents, contractors, suppliers, government officials, or other parties with a conflict of interest to either provide or receive improper benefits. This does not apply to those legally operating within the jurisdiction.	(Offering and Accepting Bribes) When conducting the business of the Company, the directors, supervisors, managers, employees, and Controlling Persons shall not, either directly or indirectly, provide, promise, request, or receive any improper benefits, including offering discounts, commissions, middle-man fees, or using a third party customers, agents, contractors, suppliers, government officials, or other parties with a conflict of interest to either provide or receive improper benefits. This does not apply to those legally operating within the jurisdiction.
Article 9	(Prohibition on Making Illegal Political Donations) When making any political donations, whether directly or indirectly, to any political party, political organization, or individual political figure, the Company, its directors, managers, employees and Controlling Persons, should abide by all laws pertaining to political donations and internal company policies, and must not seek any political benefits from such donations or any form of quid pro quo.	(Prohibition on Making Illegal Political Donations) When making any political donations, whether directly or indirectly, to any political party, political organization, or individual political figure, the Company, its directors, supervisors, managers, employees and Controlling Persons, should abide by all laws pertaining to political donations and internal company policies, and must not seek any political benefits from such donations or any form of quid pro quo.
Article 10	(Improper Charitable Donations or Support) When making any charitable donations or supporting any charities, whether directly or indirectly, the Company, its directors, managers, employees and Controlling Persons, should abide by all relevant laws and internal company policies, and must ensure that such efforts are not construed as bribes.	(Improper Charitable Donations or Support) When making any charitable donations or supporting any charities, whether directly or indirectly, the Company, its directors, supervisors, managers, employees and Controlling Persons, should abide by all relevant laws and internal company policies, and must ensure that such efforts are not construed as bribes.
Article 11	(Improper Gifts, Hospitality, or Other Improper Benefits) The Company, its directors, managers, employees, and Controlling Persons, should not accept any gifts, hospitality, or improper benefits, as a means of building a relationship with the Company or as a means of influencing the business of the Company.	(Improper Gifts, Hospitality, or Other Improper Benefits) The Company, its directors, managers, supervisors, employees, and Controlling Persons, should not accept any gifts, hospitality, or improper benefits, as a means of building a relationship with the Company or as a means of influencing the business of the Company.
Article 13	(Abiding by the Laws During the Course of Executing Business of the Company) The Company’s Directors, managers, employees, and Controlling Persons should abide by all relevant laws and internal company policies when conducting the business of the Company.	(Abiding by the Laws During the Course of Executing Business of the Company) The Company’s Directors, supervisors, managers, employees, and Controlling Persons should abide by all relevant laws and internal company policies when conducting the business of the Company.
Article 14	(Conflicts of Interest for Directors and Managers) The Company should establish policies aimed at preventing conflicts of interest and should create channels of communication so that directors and managers can proactively report whether any conflicts of interest exist. The Company should be extra vigilant in ensuring that directors who may have conflicts of interest with regard to certain motions before the board be required to describe and explain the circumstances of such potential conflicts, and, where necessary, that he/she be prevented from participating in discussions on, and from exercising his/her voting rights with regard to, any such motions for which there are suspected conflicts. Directors should not make improper personal arrangements with other directors to support one another. Directors and managers of the Company should not use their position within the company to provide improper benefits to himself/herself, or to his/her spouse, parents, children, or anyone else.	(Conflicts of Interest for Directors and Managers) The Company should establish policies aimed at preventing conflicts of interest and should create channels of communication so that directors, supervisors, and managers can proactively report whether any conflicts of interest exist. The Company should be extra vigilant in ensuring that directors who may have conflicts of interest with regard to certain motions before the board be required to describe and explain the circumstances of such potential conflicts, and, where necessary, that he/she be prevented from participating in discussions on, and from exercising his/her voting rights with regard to, any such motions for which there are suspected conflicts. Directors should not make improper personal arrangements with other directors to support one another. Directors, supervisors, managers of the Company should not use their position within the company to provide improper benefits to himself/herself, or to his/her spouse, parents, children, or anyone else.
Article 16	(Training and Testing) The Company should arrange periodic ethical behavior training and counseling for directors, managers, employees and Controlling Persons. Training courses should also be arranged for all divisions within the Company to familiarize those relevant employees with the Company’s Ethical Corporate Management Best Practice Principles, so that they have a clear understanding of the importance of the Company’s Ethical Corporate Management Best Practice Principles and of the consequences for violating those principles. The Company should ensure that human resource department policies and employee performance evaluations are linked to the Company’s Ethical Corporate Management Best Practice Principles, and should establish a clear system of rewards for abiding by those policies.	(Training and Testing) The Company should arrange periodic ethical behavior training and counseling for directors, supervisors, managers, employees and Controlling Persons. Training courses should also be arranged for all divisions within the Company to familiarize those relevant employees with the Company’s Ethical Corporate Management Best Practice Principles, so that they have a clear understanding of the importance of the Company’s Ethical Corporate Management Best Practice Principles and of the consequences for violating those principles. The Company should ensure that human resource department policies and employee performance evaluations are linked to the Company’s Ethical Corporate Management Best Practice Principles, and should establish a clear system of rewards for abiding by those policies.
Article 19	(Review and Amendment of Ethical Corporate Management Best Practice Principles) The Company should stay abreast of good examples, both domestic and foreign, of ethical behavior and should encourage directors, managers, and employees to recommend, review, and amend the Company’s Ethical Corporate Management Best Practice Principles when necessary, so as to enhance the effectiveness of the Company’s Ethical Corporate Management Best Practice Principles.	(Review and Amendment of Ethical Corporate Management Best Practice Principles) The Company should stay abreast of good examples, both domestic and foreign, of ethical behavior and should encourage directors, supervisors, managers, and employees to recommend, review, and amend the Company’s Ethical Corporate Management Best Practice Principles when necessary, so as to enhance the effectiveness of the Company’s Ethical Corporate Management Best Practice Principles.

APPENDIX V

Report of Independent Accountants Translated from Chinese

PWCR15002790

To the Board of Directors and Shareholders of President Securities Corporation

We have audited the accompanying balance sheets of President Securities Corporation as of December 31, 2015 and 2014, and the related statements of comprehensive income, of changes in equity and of cash flows for the years ended December 31, 2015 and 2014. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the "Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants" and generally accepted auditing standards in the Republic of China. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of President Securities Corporation as of December 31, 2015 and 2014 and their financial performance and cash flows for the years ended December 31, 2015 and 2014 in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and “Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants”.

PricewaterhouseCoopers, Taiwan

March 22, 2016

The accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept liability for the use of, or reliance on, the English translation or for any errors or misunderstanding that may derive from the translation.

PRESIDENT SECURITIES CORPORATION

BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


		December 31, 2015			December 31, 2014
ASSETS	Note	Amount		%		Amount		%
Current assets
Cash and cash equivalents	6(1)	$	2,767,365	5		$	2,893,011	5
Financial assets at fair value through profit or loss - current	6(2)		29,018,236	48			21,718,683	38
Available-for-sale financial assets - current	6(3)		402,961	1			-	-
Bonds purchased under resale agreements	6(4)		770,353	1			1,502,364	3
Margin loans receivable	6(5)		10,434,581	17			13,408,762	24
Refinancing security deposits			2,159	-			219	-
Receivables from refinance guaranty			4,135	-			1,670	-
Receivables from security lending			74,345	-			12,224	-
Security lending deposits			75,703	-			11,042	-
Notes receivable			3,142	-			994	-
Accounts receivable - net	6(6)		4,587,818	8			5,942,910	10
Accounts receivable - related parties	6(6)		4,109	-			4,504	-
Prepayments			32,223	-			24,102	-
Other receivables	6(7)		1,491,342	2			303,344	1
Other current assets	6(8)		2,503,733	4			2,260,110	4
Total current assets			52,172,205	86			48,083,939	85
Noncurrent assets
Financial assets at fair value through profit or loss - noncurrent	6(2)		50,980	-			50,518	-
Financial assets at cost - noncurrent	6(11)		10,466	-			18,293	-
Investments in associates	6(12)		4,661,144	8			4,410,508	8
Property and equipment, net	6(13)		2,354,427	4			2,393,640	4
Investment property, net	6(14)		281,003	-			283,104	1
Intangible assets			103,000	-			115,878	-
Deferred tax assets	6(43)		54,447	-			45,472	-
Other assets - noncurrent	6(15)		1,063,405	2			1,106,126	2
Total noncurrent assets			8,578,872	14			8,423,539	15
TOTAL ASSETS		$	60,751,077	100		$	56,507,478	100

(Continued)

PRESIDENT SECURITIES CORPORATION

BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


			December 31, 2015						December 31, 2014
LIABILITIES AND EQUITY	Note		Amount				%			Amount		%
Current liabilities
Short-term loans	6(16)		$	3,123,288			5			$	6,630,058	12
Commercial papers payable	6(17)			5,599,149			9				3,749,032	7
Financial liabilities at fair value through profit or loss - current	6(18)			1,439,975			2				2,067,573	4
Bonds sold under repurchase agreements	6(19)			15,602,560			26				9,084,470	16
Deposits on short sales				1,509,258			3				1,519,052	3
Short sale proceeds payable				1,744,273			3				1,842,391	3
Guarantee deposit received on borrowed securities				348,570			1				935,571	2
Accounts payable	6(20)			4,390,677			7				5,797,954	10
Advance receipts				349			-				89	-
Collections on behalf of third parties				1,084,727			2				268,094	-
Other payables	6(21)			2,184,830			4				1,084,899	2
Other financial liabilities - current	6(22)			851,796			1				294,585	-
Current tax liability	6(43)			81,488			-				132,115	-
Other current liabilities				2,859			-				2,538	-
Total current liabilities				37,963,799			63				33,408,421	59
Noncurrent liabilities
Deferred tax liability	6(43)			47,932			-				46,608	-
Other liabilities - noncurrent	6(23)			21,334			-				19,825	-
Total noncurrent liabilities				69,266			-				66,433	-
Total liabilities				38,033,065			63				33,474,854	59
Equity attributable to owners of the parent company
Capital
Common stock	6(25)			13,231,191			22				13,231,191	23
Capital reserve				256,116			-				256,116	1
Retained earnings	6(26)
Legal reserve				2,328,253			4				2,173,255	4
Special reserve				6,018,542			10				5,708,547	10
Unappropriated earnings				960,922			2				1,549,976	3
Other equity				201,014			-				113,539	-
Treasury shares	6(25)	(		278,026	)	(	1	)			-	-
Total equity				22,718,012			37				23,032,624	41
TOTAL LIABILITIES AND EQUITY			$	60,751,077			100			$	56,507,478	100

The accompanying notes are an integral part of these financial statements.

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

EXCEPT FOR EARNINGS PER SHARE AMOUNT)

			For the years ended December 31,
			2015							2014
	Note		Amount				%			Amount				%
Revenues
Securities brokerage fees	6(27)		$	1,351,352			38			$	1,486,244			34
Underwriting fees	6(28)			67,179			2				51,230			1
Gains on trading of securities	6(29)			358,246			10				935,794			21
Interest income	6(30)			1,261,382			36				998,753			23
(Loss) gain on valuation of trading securities	6(31)	(		503,626	)	(	14	)			96,762			2
Gain on short covering and trading securities - RS financing covering	6(32)			9,048			-				195			-
Gain (loss) on valuation of borrowed securities and bonds with resale agreements	6(33)			55,208			2			(	52,378	)	(	1	)
Gain on warrants issuance	6(34)			618,375			18				246,305			6
(Loss) gain on derivative financial instruments	6(35)	(		34,959	)	(	1	)			186,983			4
Other operating income	6(36)			328,614			9				426,964			10
Total revenues				3,510,819			100				4,376,852			100
Expenses
Handling charges	6(37)	(		178,558	)	(	5	)	(		198,077	)	(	5	)
Interest expenses	6(38)	(		340,018	)	(	10	)	(		159,670	)	(	4	)
Securities commission expense		(		253	)		-		(		311	)		-
Clearing charges		(		15,506	)		-		(		17,152	)		-
Other operating expenditures		(		69	)		-				-			-
Employee benefits	6(39)	(		1,587,940	)	(	45	)	(		1,707,450	)	(	39	)
Depreciation and amortization	6(40)	(		111,389	)	(	3	)	(		101,985	)	(	2	)
Other operating expenses	6(41)	(		1,211,498	)	(	35	)	(		1,031,010	)	(	24	)
Total expenditures and expenses		(		3,445,231	)	(	98	)	(		3,215,655	)	(	74	)

(Continued)

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(EXCEPT FOR EARNINGS PER SHARE AMOUNT)

			For the years ended December 31,
			2015							2014
	Note		Amount				%			Amount				%
Operating profit			$	65,588			2			$	1,161,197			26
Share of the profit or loss of associates and joint ventures accounted for using the equity method	6(12)			341,788			9				401,814			9
Other gains and losses	6(42)			662,668			19				204,385			5
Profit before tax				1,070,044			30				1,767,396			40
Income tax expense	6(43)	(		113,431	)	(	3	)	(		184,227	)	(	4	)
Net income				956,613			27				1,583,169			36
Other comprehensive income (loss)
Components that will not be reclassified to profit of loss subsequently
Remeasurement of defined benefit plans		(		7,299	)		-			(	52,127	)	(	1	)
Other comprehensive loss of associates and joint ventures accounted for under equity method		(		2,890	)		-			(	6,959	)		-
Income tax benefit relating to components of other comprehensive income				1,241			-				8,862			-
Items may be reclassified to profit of loss subsequently
Translation gain and loss on the financial statements of foreign operating entities				90,578			2				130,913			3
Unrealized loss on financial instruments		(		6,355	)		-			(	27,750	)		-
Other comprehensive income of associates and joint ventures accounted for under equity method				3,252			-				10,345			-
Current other comprehensive income (post-tax)				78,527			2				63,284			2
Total current comprehensive income			$	1,035,140			29			$	1,646,453			38
Earnings per share	6(44)
Basic earnings per share (in dollars)			$	0.72						$	1.20
Diluted earnings per share (in dollars)			$	0.72						$	1.20

The accompanying notes are an integral part of these financial statements.

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)



			Retained earnings			Other equity
Note	Common stock	Capital reserve	Legal reserve	Special reserve	Unappropriated earnings	Translation gain and loss on the financial statements of foreign operating entities	Unrealized gain or loss on financial instruments	Total equity	Total equity


For the year ended December 31, 2014
Balance as of January 1, 2014		$ 13,231,191	$ 256,116	$ 2,071,935		$ 5,792,801			$ 1,013,206		(	$ 27,719	)		$ 27,750			$ -			$ 22,365,280
Appropriations of earnings:
Legal reserve	6(26)	-	-	101,320		-		(	101,320	)		-			-			-			-
Special reserve	6(26)	-	-	-		202,641		(	202,641	)		-			-			-			-
Reversal of special reserve	6(26)	-	-	-	(	286,895	)		286,895			-			-			-			-
Cash dividends	6(26)	-	-	-		-		(	979,109	)		-			-			-		(	979,109	)
Net income for the year		-	-	-		-			1,583,169			-			-			-			1,583,169
Other comprehensive (loss) income for the year		-	-	-		-		(	50,224	)		130,913		(	17,405	)		-			63,284
Balance at December 31, 2014		$ 13,231,191	$ 256,116	$ 2,173,255		$ 5,708,547			$ 1,549,976			$ 103,194			$ 10,345			$ -			$ 23,032,624
For the year ended December 31, 2015
Balance as of January 1, 2015		$ 13,231,191	$ 256,116	$ 2,173,255		$ 5,708,547			$ 1,549,976			$ 103,194			$ 10,345			$ -			$ 23,032,624
Appropriations of earnings:
Legal reserve	6(26)	-	-	154,998		-		(	154,998	)		-			-			-			-
Special reserve	6(26)	-	-	-		309,995		(	309,995	)		-			-			-			-
Cash dividends	6(26)	-	-	-		-		(	1,071,726	)		-			-			-		(	1,071,726	)
Net income for the year		-	-	-		-			956,613			-			-			-			956,613
Other comprehensive (loss) income for the year		-	-	-		-		(	8,948	)		90,578		(	3,103	)		-			78,527
Acquisition of treasury stocks	6(25)	-	-	-		-			-			-			-		(	278,026	)	(	278,026	)
Balance at December 31, 2015		$ 13,231,191	$ 256,116	$ 2,328,253		$ 6,018,542			$ 960,922			$ 193,772			$ 7,242		(	$ 278,026	)		$ 22,718,012

The accompanying notes are an integral part of these financial statements.

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


			For the years ended December 31,
	Note			2015				2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before tax			$	1,070,044			$	1,767,396
Adjustments to reconcile profit before tax to net cash (used in) provided by operating activities:
Income and expenses without cash flow impact
Depreciation	6(40)			87,386				91,307
Amortization	6(40)			24,003				10,678
Write-off of bad debts classified as income	6(6)	(		176	)	(		353	)
Provision for bad debts	6(6)			152,228				2,638
Loss (gain) on valuation of trading securities– current	6(2)(31)			503,626		(		96,762	)
Financial expense	6(38)			340,018				159,670
Interest income	6(30)(42)	(		1,297,186	)	(		1,056,518	)
Dividend income	6(36)	(		147,038	)	(		254,921	)
Share of the profit of associates and joint ventures accounted for using the equity method	6(12)	(		341,788	)	(		401,814	)
Loss on disposal of property and equipment	6(13)			1,210				-
Loss (gain) on valuation of open-ended funds and money-market instruments	6(2)			5,815		(		3,839	)
Loss on impairment of financial assets at cost	6(11)			-				448
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss		(		7,809,456	)	(		3,147,221	)
Available-for-sale financial assets – current		(		409,316	)			322,120
Bonds purchased under resale agreements				732,011		(		1,317,467	)
Margin loans receivable				2,976,169		(		1,895,243	)
Refinancing security deposits		(		1,940	)			24,476
Receivables from refinance guaranty		(		2,465	)			57,964
Receivables from security lending		(		62,121	)			17,769
Security lending deposits		(		64,661	)			38,575
Notes receivable		(		2,148	)			2,366
Accounts receivable				1,296,489				2,131,138
Accounts receivable-related parties				395		(		1,028	)
Prepayments		(		8,121	)			684
Other receivables				285,464		(		286,446	)
Other current assets		(		243,623	)	(		28,802	)
Changes in operating liabilities
Financial liabilities at fair value through profit or loss – current		(		627,598	)			835,419
Bonds sold under repurchase agreements				6,518,090				2,812,355
Deposits on short sales		(		9,794	)			283,209
Short sale proceeds payable		(		98,118	)			242,585
Guarantee deposit received on borrowed securities		(		587,001	)			406,262
Accounts payable		(		1,402,423	)	(		2,046,005	)
Advance receipts				260		(		49	)
Collections on behalf of third parties				816,633		(		158,241	)
Other payables		(		377,821	)			348,265
Other financial liabilities – current				557,211				201,187
Other current liabilities				321				378

(Continued)

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


			For the years ended December 31,
	Note			2015				2014
Cash provided by (used in) operations			$	1,874,579		(	$	937,820	)
Dividends received				324,899				376,708
Interest received				1,203,348				988,888
Income tax paid		(		170,468	)	(		66,230	)
Net cash provided by operating activities				3,232,358				361,546
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from capital reduction of financial assets measured at cost				7,827				21,903
Acquisition of investments in associates	6(13)	(		23,300	)	(		32,482	)
Proceeds from disposal of property and equipment				174				-
Acquisition of intangible assets		(		1,831	)	(		104,297	)
Decrease (increase) in other non-current assets				38,408		(		147,731	)
Increase in prepayment for equipment		(		36,436	)	(		30,656	)
Net cash used in investing activities		(		15,158	)	(		293,263	)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease) increase in short-term loans		(		3,506,770	)			4,180,058
Increase (decrease) in commercial papers payable				1,850,000		(		3,200,000	)
Increase in other non-current liabilities				1,509				70
Payments of cash dividends	6(26)	(		1,071,726	)	(		979,109	)
Acquisition of treasury stocks	6(25)	(		278,026	)			-
Interest paid		(		342,081	)	(		149,760	)
Net cash (used in) provided by financing activities		(		3,347,094	)	(		148,741	)
Effect of exchange rate changes				4,248				3,447
Net decrease in cash and cash equivalents		(		125,646	)	(		77,011	)
Cash and cash equivalents, beginning of year				2,893,011				2,970,022
Cash and cash equivalents, end of year			$	2,767,365			$	2,893,011

The accompanying notes are an integral part of these financial statements.

PRESIDENT SECURITIES CORPORATION

Declaration of Consolidated Financial Statements of Affiliated Enterprises

The companies included in the consolidated financial statements of affiliated enterprises prepared by the Company for 2015 (from January 1, 2015 to December 31, 2015) in accordance with Article 33 of the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are identical with those to be included in the consolidated financial statements of the parent company and subsidiaries in accordance with IFRS 10,“Consolidated Financial Statements”. The relevant information to be disclosed in the consolidated financial statements of affiliated enterprises has already been disclosed in the consolidated financial statements of the parent company and subsidiaries. Therefore, the Company does not prepare the consolidated financial statements of affiliated enterprises separately.

Hereby declare

PRESIDENT SECURITIES CORPORATION

Responsible person:

LIN, CHUNG-SHEN

March 22, 2016

Report of Independent Accountants Translated from Chinese

PWCR15003313

To the Board of Directors and Shareholders of President Securities Corporation

We have audited the accompanying consolidated balance sheets of President Securities Corporation and its subsidiaries as of December 31, 2015, and 2014, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended. These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of President Securities Corporation and its subsidiaries as of December 31, 2015 and 2014, and their financial performance and cash flows for the years then ended, in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms”, “Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants”, and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

We have audited the parent company only financial statements of President Securities Corporation ( not presented herein ) as of and for the years ended December 31, 2015 and 2014 on which we have issued an unqualified opinion thereon.

PricewaterhouseCoopers, Taiwan

March 22, 2016

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


		December 31, 2015			December 31, 2014
ASSETS	Note	Amount		%	Amount		%
Current assets
Cash and cash equivalents	6(1)	$	5,115,617	7	$	6,355,219	10
Financial assets at fair value through profit or loss - current	6(2)		29,976,972	43		22,714,617	35
Available-for-sale financial assets - current	6(3)		402,961	1		-	-
Bonds purchased under resale agreements	6(4)		770,353	1		1,502,364	2
Margin loans receivable	6(5)		10,434,581	15		13,408,762	21
Refinancing security deposits			2,159	-		219	-
Receivables from refinance guaranty			4,135	-		1,670	-
Customer margin account	6(6)		7,686,554	11		5,569,228	8
Receivables from security lending			74,345	-		12,224	-
Security lending deposits			75,703	-		11,042	-
Notes receivable			3,142	-		994	-
Accounts receivable	6(7)		5,517,496	8		6,905,877	11
Prepayments			38,211	-		27,794	-
Other receivables	6(8)		1,530,833	2		354,054	-
Current tax assets			1,092	-		1,590	-
Other current assets	6(9)		3,551,317	5		3,106,558	5
Total current assets			65,185,471	93		59,972,212	92
Noncurrent assets
Financial assets at fair value through profit or loss - noncurrent	6(2)		50,980	-		50,518	-
Financial assets at cost - noncurrent	6(12)		41,581	-		49,408	-
Available-for-sale financial assets - noncurrent	6(3)		59,479	-		56,115	-
Investments in associates	6(13)		444,541	1		426,021	1
Property and equipment, net	6(14)		2,520,596	4		2,562,705	4
Investment property, net	6(15)		281,003	-		283,104	1
Intangible assets			144,659	-		160,276	-
Deferred tax assets	6(44)		56,331	-		47,451	-
Other assets - noncurrent	6(16)		1,304,892	2		1,339,736	2
Total noncurrent assets			4,904,062	7		4,975,334	8
TOTAL ASSETS		$	70,089,533	100	$	64,947,546	100
LIABILITIES AND EQUITY
Current liabilities
Short-term loans	6(17)	$	3,736,439	5	$	8,760,977	14
Commercial papers payable	6(18)		5,599,149	8		3,749,032	6
Financial liabilities at fair value through profit or loss - current	6(19)		1,440,081	2		2,068,250	3
Bonds sold under repurchase agreements	6(20)		15,602,560	22		9,084,470	14
Deposits on short sales			1,509,258	2		1,519,052	2

(Continued)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


		December 31, 2015				December 31, 2014
LIABILITIES AND EQUITY	Note	Amount			%	Amount		%
Short sale proceeds payable		$	1,744,273		3	$	1,842,391	3
Guarantee deposit received on borrowed securities			348,570		1		935,571	1
Futures traders' equity	6(6)		7,678,157		11		5,553,149	9
Accounts payable	6(21)		5,267,876		8		6,435,497	10
Advance receipts			1,672		-		484	-
Collections on behalf of third parties			1,087,027		2		269,955	-
Other payables	6(22)		2,294,947		3		1,159,281	2
Other financial liabilities - current	6(23)		851,796		1		294,585	-
Current tax liability	6(44)		97,481		-		134,160	-
Other current liabilities			5,861		-		5,132	-
Total current liabilities			47,265,147		68		41,811,986	64
Noncurrent liabilities
Deferred tax liability	6(44)		48,487		-		49,100	-
Other liabilities-noncurrent	6(24)		11,848		-		10,984	-
Total noncurrent liabilities			60,335		-		60,084	-
Total liabilities			47,325,482		68		41,872,070	64
Equity attributable to owners of the parent company
Capital
Common stock	6(26)		13,231,191		19		13,231,191	20
Capital reserve			256,116		-		256,116	1
Retained earnings	6(27)
Legal reserve			2,328,253		3		2,173,255	3
Special reserve			6,018,542		9		5,708,547	9
Unappropriated earnings			960,922		1		1,549,976	3
Other equity			201,014		-		113,539	-
Treasury shares	6(26)	(	278,026	)	-		-	-
Total			22,718,012		32		23,032,624	36
Non-controlling interests			46,039		-		42,852	-
Total equity			22,764,051		32		23,075,476	36
TOTAL LIABILITIES AND EQUITY		$	70,089,533		100	$	64,947,546	100

The accompanying notes are an integral part of these financial statements.

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNT)


			For the years ended December 31,
			2015							2014
	Note		Amount				%			Amount				%
Revenues
Securities brokerage fees	6(28)		$	2,135,628			47			$	2,132,591			41
Underwriting fees	6(29)			67,179			1				51,230			1
Gains on trading of securities	6(30)			377,810			8				948,258			19
Interest income	6(31)			1,332,497			29				1,051,309			20
(Loss) gain on valuation of trading securities	6(32)	(		500,565	)	(	11	)			111,138			2
Gain on short covering and trading securities - RS financing covering	6(33)			9,048			-				195			-
Gain (loss) on valuation of borrowed securities and bonds with resale agreements	6(34)			55,208			1			(	52,378	)	(	1	)
Gain on warrants issuance	6(35)			618,375			14				246,305			5
Gain on derivative financial instruments	6(36)			93,895			2				195,678			4
Other operating income	6(37)			391,768			9				478,971			9
Total revenues				4,580,843			100				5,163,297			100
Expenses
Handling charges	6(38)	(		324,188	)	(	7	)	(		311,754	)	(	6	)
Interest expenses	6(39)	(		357,778	)	(	8	)	(		178,055	)	(	4	)
Futures commission expense		(		79,729	)	(	2	)	(		73,655	)	(	1	)
Clearing charges		(		109,729	)	(	2	)	(		90,731	)	(	2	)
Other operating expenditures		(		69	)		-				-			-
Employee benefits	6(40)	(		1,922,879	)	(	42	)	(		1,978,845	)	(	38	)
Depreciation and amortization	6(41)	(		123,702	)	(	3	)	(		117,581	)	(	2	)
Other operating expenses	6(42)	(		1,410,029	)	(	31	)	(		1,175,651	)	(	23	)
Total expenditures and expenses		(		4,328,103	)	(	95	)	(		3,926,272	)	(	76	)

(Continued)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNT)

			For the years ended December 31,
			2015							2014
	Note		Amount				%			Amount				%
Operating profit			$	252,740			5			$	1,237,025			24
Share of the profit or loss of associates and joint ventures accounted for using the equity method	6(13)			82,130			2				71,854			2
Other gains and losses	6(43)			773,834			17				482,484			9
Profit before tax				1,108,704			24				1,791,363			35
Income tax expense	6(44)	(		146,169	)	(	3	)	(		204,082	)	(	4	)
Net income				962,535			21				1,587,281			31
Other comprehensive income
Components that will not be reclassified to profit of loss subsequently
Remeasurement of defined benefit plans		(		8,120	)		-		(		55,315	)	(	1	)
Other comprehensive loss of associates and joint ventures accounted for under equity method		(		2,216	)		-		(		4,384	)		-
Income tax benefit relating to components of other comprehensive income				1,380			-				9,404			-
Items may be reclassified to profit of loss subsequently
Translation gain on the financial statements of foreign operating entities				90,578			2				130,913			2
Unrealized loss on financial instruments		(		2,992	)		-		(		17,051	)		-
Current other comprehensive income (post-tax)				78,630			2				63,567			1
Total current comprehensive income			$	1,041,165			23			$	1,650,848			32
Income attributable to:
Parent company			$	956,613			21			$	1,583,169			31
Non-controlling interests			$	5,922			-			$	4,112			-
Current comprehensive income attributable to:
Parent company			$	1,035,140			23			$	1,646,453			32
Non-controlling interests			$	6,025			-			$	4,395			-
Earnings per share	6(45)
Basic earnings per share (in dollars)			$	0.72						$	1.20
Diluted earnings per share (in dollars)			$	0.72						$	1.20

The accompanying notes are an integral part of these financial statements.

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


		Equity attributable to owners of the parent company
				Retained earnings			Other equity
Note	Common stock		Capital reserve	Legal reserve	Special reserve	Unappropriated earnings	Translation gain and loss on the financial statements of foreign operating entities	Unrealized gain or loss on financial instruments	Treasury stock	Total	Non-controlling interest	Total equity


For the year ended December 31, 2014
Balance as of January 1, 2014		$ 13,231,191	$ 256,116	$ 2,071,935		$ 5,792,801			$ 1,013,206		(	$ 27,719	)		$ 27,750			$ -1			$ 22,365,280,			$ 40,923			$ 22,406,203
Appropriations of 2013 earnings:
Legal reserve	6(27)	-	-	101,320		-		(	101,320	)		-			-			-			-			-			-
Special reserve	6(27)	-	-	-		202,641		(	202,641	)		-			-			-			-			-			-
Reversal of special reserve	6(27)	-	-	-	(	286,895	)		286,895			-			-			-			-			-			-
Cash dividends	6(27)	-	-	-		-		(	979,109	)		-			-			-		(	979,109	)		-		(	979,109	)
Net income for the year		-	-	-		-			1,583,169			-			-			-			1,583,169			4,112			1,587,281
Other comprehensive (loss) income for the year		-	-	-		-		(	50,224	)		130,913		(	17,405	)		-			63,284			283			63,567
Changes in non-controlling interests		-	-	-		-			-			-			-			-			-		(	2,466	)	(	2,466	)
Balance at December 31, 2014		$ 13,231,191	$ 256,116	$ 2,173,255		$ 5,708,547			$ 1,549,976			$ 103,194			$ 10,345			$ -			$ 23,032,624			$ 42,852			$ 23,075,476
For the year ended December 31, 2015
Balance as of January 1, 2015		$ 13,231,191	$ 256,116	$ 2,173,255		$ 5,708,547			$ 1,549,976			$ 103,194			$ 10,345			$ -1			$ 23,032,624			$ 42,852			$ 23,075,476
Appropriations of 2014 earnings:
Legal reserve	6(27)	-	-	154,998		-		(	154,998	)		-			-			-			-			-			-
Special reserve	6(27)	-	-	-		309,995		(	309,995	)		-			-			-			-			-			-
Cash dividends	6(27)	-	-	-		-		(	1,071,726	)		-			-			-		(	1,071,726	)		-		(	1,071,726	)
Net income for the year		-	-	-		-			956,613			-			-			-			956,613			5,922			962,535
Other comprehensive (loss) income for the year		-	-	-		-		(	8,948	)		90,578		(	3,103	)		-			78,527			103			78,630
Acquisition of treasury stocks	6(26)	-	-	-		-			-			-			-		(	278,026	)	(	278,026	)		-		(	278,026	)
Changes in non-controlling interests		-	-	-		-			-			-			-			-			-		(	2,838	)	(	2,838	)
Balance at December 31, 2015		$ 13,231,191	$ 256,116	$ 2,328,253		$ 6,018,542			$ 960,922			$ 193,772			$ 7,242		(	$ 278,026	)		$ 22,718,012			$ 46,039			$ 22,764,051

The accompanying notes are an integral part of these financial statements.

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


	Note			For the year ended December 31, 2015				For the year ended December 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before tax			$	1,108,704			$	1,791,363
Adjustments to reconcile profit before tax to net cash provided by operating activities:
Income and expenses without cash flow impact
Depreciation	6(41)			94,478				99,490
Amortization	6(41)			29,224				18,091
Write-off of bad debts classified as income	6(16)	(		176	)	(		353	)
Provision for bad debts	6(16)			161,237				2,638
Loss (gain) on valuation of trading securities - current	6(32)			500,565		(		111,138	)
Financial expense	6(39)			357,778				178,055
Interest income	6(31),(43)	(		1,476,709	)	(		1,300,487	)
Dividend income	6(13)	(		162,216	)	(		266,970	)
Share of the profit of associates and joint ventures accounted for using the equity method	6(14)	(		82,130	)	(		71,854	)
Loss on disposal of property and equipment	6(12)			1,234				2
Loss on disposal of investments (financial assets measured at cost)	6(43)			-				448
Loss (gain) on valuation of open-ended funds and money-market instruments				1,664		(		4,531	)
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss		(		7,765,047	)	(		2,887,007	)
Available-for-sale financial assets - current		(		409,316	)			322,120
Bonds purchased under resale agreements				732,011		(		1,317,467	)
Margin loans receivable				2,976,169		(		1,895,243	)
Refinancing security deposits		(		1,940	)			24,476
Receivables from refinance guaranty		(		2,465	)			57,964
Customer margin account		(		2,117,326	)	(		651,794	)
Receivables from security lending		(		62,121	)			17,769
Security lending deposits		(		64,661	)			38,575
Notes receivable		(		2,148	)			2,366
Accounts receivable				1,329,922				1,548,437
Prepayments		(		10,417	)			26,484
Other receivables				287,732		(		288,473	)
Other current assets		(		444,759	)			190,899
Changes in operating liabilities
Financial liabilities at fair value through profit or loss - current		(		628,169	)			836,096
Bonds sold under repurchase agreements				6,518,090				2,812,355
Deposits on short sales		(		9,794	)			283,209
Short sale proceeds payable		(		98,118	)			242,585
Guarantee deposit received on borrowed securities		(		587,001	)			406,262
Futures traders' equity				2,125,008				635,715
Accounts payable		(		1,162,767	)	(		2,169,058	)
Advance receipts				1,188				34
Collections on behalf of third parties				817,072		(		158,136	)
Other payables		(		341,651	)			307,120
Other financial liabilities - current				557,211				201,187
Other current liabilities				729				532

(Continued)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


	Note			For the year ended December 31, 2015				For the year ended December 31, 2014
Cash provided by (used in) operations			$	2,171,085		(	$	1,078,239	)
Dividends received				221,921				310,042
Interest received				1,384,375				1,233,955
Income tax paid		(		190,463	)	(		82,959	)
Net cash provided by operating activities				3,586,918				382,799
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of available-for-sale financial assets - noncurrent	6(3)			-		(		45,416	)
Proceeds from capital reduction of financial assets measured at cost	6(12)			7,827				21,903
Acquisition of property and equipment	6(14)	(		26,668	)	(		36,025	)
Proceeds from disposal of property and equipment				183				56
Acquisition of intangible assets		(		3,825	)	(		143,252	)
Decrease (increase) in other non-current assets				31,239		(		146,510	)
Increase in prepayment for equipment		(		39,314	)	(		31,490	)
Net cash used in investing activities		(		30,558	)	(		380,734	)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease) increase in short-term loans		(		5,024,538	)			5,281,717
Increase (decrease) in commercial papers payable				1,850,000		(		3,200,000	)
Increase in other non-current liabilities				864				2,402
Payments of cash dividend	6(27)	(		1,071,726	)	(		979,109	)
Acquisition of treasury stocks	6(26)	(		278,026	)			-
Interest paid		(		360,276	)	(		167,729	)
Changes in non-controlling interest		(		2,838	)	(		2,466	)
Net cash (used in) provided by financing activities		(		4,886,540	)			934,815
Effect of exchange rate changes				90,578				130,855
Net (decrease) increase in cash and cash equivalents		(		1,239,602	)			1,067,735
Cash and cash equivalents, beginning of year				6,355,219				5,287,484
Cash and cash equivalents, end of year			$	5,115,617			$	6,355,219

The accompanying notes are an integral part of these financial statements.

APPENDIX VI


President Securities Corporation
2015 Earnings Distribution Proposal
	Unit:：NT$
Unappropriated earnings as of January 1, 2015 (Note 1)	$13,257,007
Less：Adjustment to unappropriated earnings of 2015 (Note 2)	(8,948,098)
Unappropriated earnings after adjustment	4,308,909
Add ：Net profit after tax of 2015	956,613,559
Subtotal	960,922,468
Less：Legal Reserve (10%) (Note 3)	(95,661,356)
Special Reserve (20%) (Note 3)	(191,322,712)
Unappropriated earnings Available for Distribution	673,938,400
Distribution items
─ Cash dividend (NT$ 0.20 / per share)	260,759,211
─ Stock dividend (NT$ 0.31 / per share)	404,176,780
Unappropriated earnings as of December 31, 2015	$9,002,409

Note 1: The amount of unappropriated earnings in the earning distributions resolved by the shareholders’ meeting of 2015

Note 2: The Company adopted T-IFRSs (2013 version) in 2015 and unappropriated earnings was decreased by $8,948,098 due to actuarial loss from defined benefits plan (included in other comprehensive income).

Note 3: According to Article 237 of the Company Act, Jingshan Letter No.10102268370 and No.10202433490, Paragraph 1 of Article 41 of the Securities and Exchange Act, Article 14 of Regulations Governing Securities Firms, and Article 23 of the Company’s Article of Incorporation, 10% and 20% were set aside as legal reserve and special reserve.

Note 4: Prior years’ unappropriated earnings shall not be appropriated unless the current year’s unappropriated earnings is insufficient for distribution.

Note 5: Total common shares outstanding as of December 31, 2015 was 1,303,796,054 shares

APPENDIX VII

Comparison table of Amendments to” Operating Procedures for Endorsement and Guarantee”


Article	Amendment	Original Articles
Article 2	The Company may provide endorsements and guarantees for its overseas subsidiary for which the Company, either directly or indirectly, holds 50% or more of the voting shares.	When offering guarantees, the Company shall only provide collateral in the form of assets.
Article 3	The Company may provide endorsements and guarantees for its overseas subsidiary as mentioned in the previous Article only under the following circumstances: 1. For the purposes of underwriting, the parent company may provide guarantees or offer its assets as collateral. 2. For the purposes of issuing foreign warrants, the parent company may provide guarantees or offer its assets as collateral, where the subsidiary is a signatory to IOSCO. 3. For the purposes of serving as the financial institution using or guaranteeing offshore structured products, for sale within the ROC in accordance with the laws and regulations of the ROC, with another domestic parent company serving as the as the primary sales agent, and where that other domestic parent company should agree to be jointly and severally liable for said offshore structure note products. 4. Where it is necessary for margin operations by local financial institutions, the parent company may provide endorsements or guarantees.	The Company may only provide guarantees for the following counterparties: 1. Foreign securities firms for which the Company holds, either directly or indirectly, 50% or more of the voting shares, and for the purposes of underwriting. 2. Foreign subsidiaries of the Company for which the Company holds, either directly or indirectly, 50% or more of the voting shares, and where this subsidiary is a signatory to IOSCO, and for the purposes of issuing foreign warrants. 3. Foreign subsidiaries of the Company for which the Company holds, either directly or indirectly, 50% or more of the voting shares, and where such subsidiary requires a local margin financial institution. 4. Other counterparties as permitted by the laws.
Article 4	Before the abovementioned guarantee is provided by the Company, a report on the circumstances of the guarantee should be submitted to the board of directors and should be handled within the Company’s endorsement and guarantee limits and in accordance with the Guidelines for Endorsements and Guarantees, and a follow-up report should also be submitted to the Board of Directors after the guarantee has been issued. Major endorsements and guarantees should be submitted to and approved by the Auditing Committee by a majority vote before being submitted to the Board of Directors for resolution. But, where the company requiring the guarantee is a 100%-owned subsidiary of the Company, only a notification needs to be sent to the board after the guarantee has been implemented, and no report is necessary beforehand.	Before the abovementioned guarantee is provided by the Company, a report on the circumstances of the guarantee to be provided should be submitted to the board of directors and should be handled within the Company’s endorsement and guarantee limits and in accordance with the Guidelines for Endorsements and Guarantees, and a follow-up report should also be submitted to the Board of Directors after the guarantee has been issued. But, where the company requiring the guarantee is a 100%-owned subsidiary of the Company, only a notification needs to be sent to the board after the guarantee has been implemented, and no report is necessary beforehand.
Article 4-1	If the company issues endorsements or guarantees than initially complied with Article 2 of the Guidelines for Endorsements and Guarantees, but subsequently do not; or if the Company’s net value changes such that endorsements and guarantees already issued no longer conform to Article 4, a rectification plan should be submitted to the Auditing Committee and the Board of Directors. The timeline stated in the rectification plan should be followed.	If the company issues endorsements or guarantees than initially complied with Article 3 of the Guidelines for Endorsements and Guarantees, but subsequently do not; or if the Company’s net value changes such that endorsements and guarantees already issued no longer conform to Article 4, a rectification plan should be submitted to the Supervisors and the Board of Directors. The timeline stated in the rectification plan should be followed.
Article 5	Where a company meets the description of a subsidiary as defined under Article 2, and where that company has a business need, the Company may provide guarantee, whereby an application should be submitted to the Finance Department, forwarded to the President’s Office, and then approved by the Chairman of the Board, and handled in accordance with Article 4 of the Guidelines for Endorsements and Guarantees.	Where a company meets the description of a subsidiary as defined under Article 3, and where that company has a business need, the Company may provide guarantee, whereby an application should be submitted to the Finance Department, forwarded to the President’s Office, and then approved by the Chairman of the Board, and handled in accordance with Article 4 of the Guidelines for Endorsements and Guarantees.
Article 10	These Procedures should be approved by a majority vote in the Auditing Committee, whereafter it should be approved by the Board of Directors, before being sent to the shareholders for approval. Any amendments made should be handled in the same manner. If These Procedures do not receive a majority approval from the Auditing Committee, it may still be approved by the Board of Directors via a two-thirds vote at a meeting attended by all directors, and the outcome of the Auditing Committee vote should be noted.	These Procedures should be approved by the Board of Directors, before being submitted to the Supervisor for submission to the shareholders for approval. The Company should submit any opinions of dissenting Directors or any written opinions on These Procedures together to the Supervisor who, in turn, should submit the same the shareholders for discussion. Any amendments should be handled in the same manner.

APPENDIX VIII

Comparison table of Amendments to” Procedures for Engaging in Derivatives Trading”


Article	Amendment	Original Articles
Article 3	Trading Principles 1. Division of Responsibilities 2. Settlement Department 3. Confirms every trading order against every order ticket and completes each transaction. 4. Checks and saves copies of all trading orders. 5. Responsible for overseeing and recordation of all master agreements entered into with trading counterparties, plus all schedules, and related information, and for preparing the same for inspection by the regulators. 6. Prepares monthly trading statistics in accordance with the format required by the regulators for derivatives trading. 7. Records trading statistics on a daily basis and confirms whether each trade is for “Hedging” or “Non-hedging” purposes; calculates all realized or expected profits and losses so as to get an accurate picture of the Company’s open positions so as to provide accurate hedging data. 8. Manages derivatives fund access limits, profit and loss snapshots, exceptional events, and then takes necessary risk control. 5. Trading Limits 1. The Company treats its derivative trading as either “Hedging” or “Non-hedging”, based on the nature of the trade. The ALCO sets the total value of the contracts or securities based on the needs of the Company. 2. Business Division position sets position limits and loss limits for each type of trade based on the type of derivative products.	Trading Principles 1. Division of Responsibilities 2. Settlement Department 3. Confirms every trading order against every order ticket and completes each transaction. 4. Checks and saves copies of all trading orders. 5. Risk Control Division 6. Responsible for overseeing and recordation of all master agreements entered into with trading counterparties, plus all schedules, and related information, and for preparing the same for inspection by the regulators. 7. Prepares monthly trading statistics in accordance with the format required by the regulators for derivatives trading. 8. Records trading statistics on a daily basis and confirms whether each trade is for “Hedging” or “Non-hedging” purposes; calculates all realized or expected profits and losses so as to get an accurate picture of the Company’s open positions so as to provide accurate hedging data. 9. Compiles monthly data on derivative trades already booked, including both already realized or expected profits or losses, and prepares regular financial reports in accordance with the format stipulated by the regulators, and publishes key derivatives trading data. 10. Manages derivatives trading risk, fund access limits, profit and loss snapshots, exceptional events, and then evaluates and proposes necessary adjustments to risk management guidelines. 5. Trading Limits The Company treats its derivative trading as either “Hedging” or “Non-hedging”, based on the nature of the trade. The ALCO sets position limits and loss limits for each type of trade based on the needs of the Company and on the total value of the underling.
Article 5	Risk Management Measures 1. The following risk management measures should be employed when conducting any derivatives trades: 2. Market Risk Management On a regular basis, or whenever necessary, the Risk Control Division should work with the various trading divisions to conduct formula price evaluations so as to accurately predict future market fluctuations and the profit or loss effects those changes could have on open positions.	Risk Management Measures 1. The following risk management measures should be employed when conducting any derivatives trades: 2. Market Risk Management On a regular basis, or whenever necessary, the Finance Department should work with the various trading divisions to conduct market evaluations so as to accurately predict future market fluctuations and the profit or loss effects those changes could have on open positions.
Article 7	Internal Auditing Measures 1. Internal auditing personnel should regularly, and when necessary, evaluate the appropriateness of the internal control measures, and should produce a monthly audit report based on a monthly evaluation of the derivatives trading procedures used by the trading departments, so as to identify any serious violations of the regulations in place, and then report to the Audit Committee, if warranted.	Internal Auditing Measures 1. Internal auditing personnel should regularly, and when necessary, evaluate the appropriateness of the internal control measures, and should produce a monthly audit report based on a monthly evaluation of the derivatives trading procedures used by the trading departments, so as to identify any serious violations of the regulations in place, and then to properly notify the Company’s Supervisor in writing, if warranted.
Article 8	Methods for Regular Evaluations and for Handling Abnormal Events 1. The Risk Control Division should conduct regular reviews of the business units in accordance with the following principles: 2. Does current risk management measure appropriate and are they being implemented in accordance with “Guidelines for the Purchase or Sale of Assets by Public Companies” and the Procedures and evaluate the amendment to relevant rules of risk control.	Methods for Regular Evaluations and for Handling Abnormal Events 1. The Risk Control Division should conduct regular reviews of the business units in accordance with the following principles: 2. Does current risk management measure appropriate and are they being implemented in accordance with “Guidelines for the Purchase or Sale of Assets by Public Companies” and the Procedures.
Article 9	Information Disclosure The Business Division, Finance Department and Settlement Department should disclose all necessary information in accordance with relevant laws and regulations issued by the competent authority.	Information Disclosure The Finance Department should disclose all necessary information in accordance with relevant laws and regulations issued by the competent authority.

Appendix IX

President Securities Corp.

Rules and Procedures of Shareholders’ Meeting

Article01. These Rules are prescribed in accordance with Article 5 of the Corporate Governance Best-Practice Principles for TSE/GTSM Listed Companies for the purpose of establishing good governance, strengthening the supervisory functions and administration by the shareholders’ meeting.

Article02. Except as otherwise provided by the laws and regulations or the Articles of Incorporation of the Company, the shareholders’ meetings of the Company shall be in accordance with these Rules.

Article03. Except as otherwise provided by the laws and regulations, the shareholders’ meeting of the Company shall be convened by the Board of Directors.

The company shall prepare electronic files of the meeting announcement, proxy form, explanatory materials relating to proposals for ratification, matters for deliberation, election or dismissal of directors or supervisors, and other matters on the shareholders’ meeting agenda, and upload them to the MOPS website thirty (30) days prior to a regular shareholders’ meeting or fifteen (15) days prior to a temporary shareholders’ meeting Twenty-one (21)days before a company is to convene an ordinary shareholders’ meeting, or fifteen (15) days before an temporary shareholders' meeting, it shall prepare an electronic file of the shareholders’ meeting agenda handbook and the supplemental materials, and upload it to the MOPS website. Fifteen (15) days before a company is to convene a shareholders’ meeting, it shall prepare the shareholders’ meeting agenda handbook and supplemental materials and make them available for the shareholders to obtain and review at any time. In addition, the handbook shall be displayed at the company and its stock registrar and transfer agent, and distributed on-site at the meeting.

The meeting notice and the public announcement of the shareholders meeting shall expressly indicate the reasons for convening the meeting.

The meeting notice can be served by means of electricity facilities if

agreed by the noticed party .

Election or dismissal of directors, supervisors, proposed amendment to the Articles of Incorporation, proposed dissolution, merger, or split of the Company, event(s) of the conditions provided in the first paragraph of Article 185 of the Company Act, or Article 26-1, or Article 43-6 of the Securities And Exchange Act must be indicated item by item in the reasons for convening the meeting in the meeting notice and none of them can be proposed by way of extempore motion.

A shareholder who holds 1% or more of the total issued shares of the Company may propose in writing one and only one proposal in advance to be included in the agenda for discussion and resolution at the shareholders meeting. All additional proposals, if any, proposed by the shareholder shall be excluded from the agenda. The Board of Directors may decide to exclude from the agenda any proposal proposed by the shareholder which runs into any of the conditions provided in the fourth paragraph of Article 172 -1 of the Company Act.

The Company shall make public announcement about when and where to submit proposal prior to the commencement date of the suspension of transfer of shares in the Company and the opening period for proposal acceptance shall not less than 10 days.

The proposal proposed by the shareholder shall be written in not more than 300 Chinese characters or shall otherwise be excluded from the agenda. The shareholder who has proposed a proposal shall personally attend the general shareholders meeting and participate in the discussion of his/her proposal or he/she may duly designate a proxy to act on his/her behalf at the meeting.

The Company shall give a notice to the shareholder prior to the meeting date regarding the Company’s handling of the proposal he/she has proposed. The Company shall, item by item, indicate in the meeting notice all of the proposals submitted in conformity to this Article and the reasons why the other proposals are excluded from the agenda.

Article04. The shareholder may designate a proxy to attend the shareholders meeting on his/her behalf by signing and indicating the scope of authority in the proxy form prepared by the Company.

Each shareholder may sign one and only one proxy form to designate one and only one proxy. The signed proxy form must be served to the Company five days prior to the meeting day. In case of multiple signed proxies from the same shareholder, the first one served to the Company shall prevail except when the shareholder has expressed to cancel the proxy.

The shareholder who, after his/her signed proxy has been served to the Company, is to attend the meeting in person or to exercise his/her voting power by way of electronic transmission shall notify the Company in writing no later than two days prior to the meeting day of his/her intention to cancel his/her signed proxy or the ballots cast by his/her designated proxy present at the meeting shall govern for the purpose of vote counting.

Article05. The shareholders meeting shall be convened at the place where the Company is located or any other appropriate place convenient for shareholders to attend and shall commence no earlier than 9:00AM and no later than 3:00PM on the meeting date. The venue, date and hour of the meeting shall be determined in consideration of the opinion of the independent director.

Article06. The company shall, in the meeting notice, state the reporting time, reporting venue and other items of importance for accepting shareholders.

The abovementioned accepted shareholders shall report at least 30 minutes before the start of the meeting; the reporting venue shall be clearly identifiable and managed by an adequate number of staff who are adequately competent.

Shareholders or agents authorized by shareholders (hereinafter referred to as shareholders) shall present their attendance ID, attendance cards or other attendance certificates at the shareholders' meeting; solicitors soliciting proxy forms shall bring along their identification documents for verification purposes.

The shareholder or his/her proxy who attends the meeting may turn in his/her signed attendance card instead of signing in the attendance book.

The Company shall deliver to each shareholder the agenda, annual report, attendance ID, speaking request form, ballots, other meeting materials and, where applicable, the ballots for election of directors and/or supervisors.

The shareholder shall present his/her attendance ID, signed attendance card or other pre-approved attendance documentation to attend the meeting. Those to attend the meeting as requesters shall also present their identification paper for verification.

A government agency shareholder or an institutional shareholder may be represented at the shareholders’ meeting by one or more proxies. An institution acting as the proxy for a shareholder may appoint one and only one representative to act on behalf of the principal of the proxy at the meeting.

Article07. Where the shareholders meeting is convened by the Board of Directors, the meeting shall be presided by the chairman of the Board of Directors. If the chairman is for whatever reason unable to carry out his/her functions at the meeting, the vice chairman shall act in his/her stand. If the Company has no vice chairman or the vice chairman is for whatever reason unable to carry out the function at the meeting either, the chairman shall appoint a standing director to act in his/her stand at the meeting. If the Company has no standing director, the chairman shall appoint a director to act in his/her stand. If above are not applicable, the directors or standing directors (if any) shall elect one from among themselves to preside the meeting.

If the abovementioned position of chairman be filled by a managing director or director, said managing director or director shall be one who has held office for more than six months and understands the company's financial and business conditions. The same applies if the position of chairman is held by a corporate director’s representative.

Where the shareholders meeting is convened by any person legally authorized to do so other than the Board of Directors, the meeting shall be presided by the convener.

Where there are two or more conveners, they shall elect one from among themselves to preside the meeting.

The Company may appoint legal counsel(s), certified public accountant(s) and/or the relevant personnel to attend the shareholders’ meeting without the right to vote.

Article08. The company shall record the entire meeting either through audio or video.

The abovementioned video and audio materials shall be kept for at least one year. However, in the event that a lawsuit has been filed by shareholder(s) in accordance with Article 189 of the Company Act, said video and audio recordings shall be kept until the end of said lawsuit.

Article09. Whether the shareholders’ meeting meets the quorum shall be determined based on the total amount of shares represented at the meeting which shall be counted according to the numbers of attendance cards received plus voting power exercised by way of electronic transmission.

The chairperson shall call the meeting to order as scheduled, provided that where the number of shares represented at the meeting accounts for less than the majority of the total issued shares, the chairperson may announce to postpone calling the meeting to order twice and only twice for a total duration of not more than one hour. If the quorum is still not met after the above postponement duration has expired and the total number of shares represented at the meeting still accounts for less than one third of the total issued shares of the Company, the chairperson shall announce to abort the meeting.

If the quorum is still not met after the meeting has been twice postponed as provided in the preceding paragraph but the number of shares represented at the meeting exceeds one third of the total issued shares of the Company, temporary resolutions may be adopted in accordance with the first paragraph of Article 175 of the Company Act, in which case, the temporary resolutions adopted shall be notified to all shareholders and the shareholders meeting shall reconvene within one month.

If, before the meeting ends, the total shares represented at the meeting account for half or more of the total issued shares of the Company, the chairperson may submit the temporary resolution adopted to the meeting for voting pursuant to Article 174 of the Company Act.

Article10. Where the shareholders’ meeting is convened by the Board of Directors, the agenda shall be determined by the Board of Directors and the meeting shall proceed according to the agenda except otherwise changed by the resolution adopted by the shareholders’ meeting.

Where the shareholders’ meeting is convened by any person legally authorized to do so other than the Board of Director, the preceding paragraph shall apply.

The chairperson shall not forthwith announce to adjourn the meeting before the agenda provided in the two preceding paragraphs (including extempore motions) is duly completed except on the resolution adopted by the shareholders’ meeting for him/her to do so. In the event the chairperson announces to adjourn the meeting in contravention to these Rules, the other members of the Board of Directors present shall promptly assist the shareholders present at the meeting to duly elect, by a majority vote, one from among the directors present to preside to continue the meeting.

The chairperson shall allow sufficient time for explanation to be given and discussion on each proposal on the agenda and each amendment or extempore motion proposed by the shareholders. The chairperson may announce to conclude the discussion as he/she sees fit and submit the proposal to voting for resolution.

Article11. The shareholder shall fill out the speaking request form floor before making statement at the meeting and he/she will indicate the gist of his/her statement to make, shareholder account number (or attendance card number) and shareholder name. The chairperson will decide the order for the shareholders to make their statement.

The shareholder who has only filled out the speaking request form floor without actually doing so shall be deemed not having made any statement. In case of any discrepancy between the gist of statement indicated in the shareholder’s speaking request and the actual statement made, the actual statement made shall govern.

The shareholder may speak on each proposal twice and only twice for not more than five minutes each except otherwise approved by the chairperson, provided that the chairperson may stop at any time the shareholder from taking the floor if such shareholder has acted in contravention of these Rules or is making statement out of the scope of the proposal being discussed.

No shareholder may interrupt the shareholder taking the floor without the consent of both of the chairperson and the shareholder taking the floor. The chairperson shall restrain any shareholder from acting in breach of the above.

An institutional shareholder who is represented by two or more appointed representatives at the meeting will have its statement on the same proposal made (if any) by one and only one of its appointed representatives.

The chairperson may personally respond to the statement made by the shareholder or appoint the relevant personnel to do so.

Article12. The votes at the shareholders’ meeting will be counted based on the number of shares.

The non-voting shares represented at the meeting shall be disregarded for the purpose of counting votes for adopting the resolution.

Shareholders who have personal conflict of interests against the Company on certain proposal shall not vote on that proposal, either for himself/herself or for another shareholder by proxy.

The non-voting shares provided in the preceding paragraph shall be excluded from the calculation of voting shares represented at the meeting.

Except trust businesses or stock affair agency approved by the competent securities authority, a proxy acting on behalf of two or more shareholders at the meeting will have the voting right by proxy representing not exceeding 3% of the total issued shares of the Company. Any vote cast by the proxy in excess of the said representation limit will be ignored.

Article13. The shareholder will have one vote for each share held except where there is limitation on the voting right or the voting right is denied by operation of the second paragraph of Article 179 of the Company Act.

The voting power at a shareholders' meeting may be exercised by way of electronic transmission described in the shareholders' meeting notice. A shareholder who exercises his/her voting power at a shareholders meeting by way of electronic transmission shall be deemed to have attended the said shareholders' meeting in person, but shall be deemed to have waived his/her voting power in respective of any extemporary motion(s) and/or the amendment(s) to the contents of the original proposal(s) at the said shareholders' meeting.

In case a shareholder elects to exercise his/her/its voting power by way of electronic transmission, his/her declaration of intention shall be served to the company two days prior to the scheduled meeting date of the shareholders' meeting, whereas if two or more declarations of the same intention are served to the company, the first declaration of such intention received shall prevail; unless an explicit statement to revoke the previous declaration is made in the declaration which comes later.

In case a shareholder who has exercised his/her voting power by way of electronic transmission intends to attend the shareholders' meeting in person, he/she shall serve a separate declaration of intention to rescind his/her previous declaration of intention made in exercising the voting power two days prior to the meeting date of the scheduled shareholders' meeting and in the same manner previously used in exercising his/her/its voting power. In the absence of a timely rescission of the previous declaration of intention, the voting power exercised by way of electronic transmission shall prevail.

In case a shareholder has exercised his/her voting power by way of electronic transmission, and has also authorized a proxy to attend the shareholders' meeting in his/her behalf, then the voting power exercised by the authorized proxy for the said shareholder shall prevail.

Except as otherwise provided by the Company Act or the Articles of Incorporation of the Company, the resolution of a shareholders meeting shall be adopted by the majority vote represented at the meeting. For the purpose of voting, the chairperson shall announce the total number of votes represented and currently present at the meeting or appoint a personnel to do so each time before calling for voting on each proposal. The resolutions, whether agreement/disagreement/waiver, shall be uploaded to the MOPS website on the day which shareholder’ meeting was held.

Upon voting for resolution on a proposal, if no opposition is expressed by shareholders present at the meeting, and shareholders either through electronic or written form, in response to the chairperson’s invitation for opinion on that proposal, the resolution shall be deemed adopted unanimously and operate as one adopted by voting. In case an opposition is expressed, the proposal shall be voted in accordance with the preceding paragraph.

Where there is revision or substitute proposal on the same proposal, the chairperson shall combine them with that proposal for the purpose of determining their order of voting. If one of the proposals is adopted, the other proposals shall be deemed vetoed and no voting on them will be necessary.

The chairperson shall appoint vote supervisor and vote counter during the voting and the vote supervisor shall also be a shareholder. The vote counting for voting or election motions at the shareholders' meeting shall be conducted publicly at the meeting venue, after vote counting has been completed, the voting results shall be announced on the spot (including the tallied number of votes) and recorded accordingly.

Article14. The election of a director and or supervisor shall be in accordance with the relevant bylaw of the Company and the result of the election, including list of elected directors and supervisors and the number of votes they received, shall be announced on site.

The ballots of the election provided in the preceding paragraph shall be sealed and signed by the personnel supervising the voting and properly kept for at least one year or up through the conclusion of the shareholder action (if any) initiated under Article 189 of the Company Act.

Article15. Each resolution adopted by the shareholders’ meeting must be taken down in the meeting minutes which must be signed or impressed with the seal of the chairperson with a copy thereof sent to the shareholders each within twenty (20) after the end of the meeting.

The Company may publish the meeting minutes provided in the preceding paragraph on the MOPS website.

The meeting minutes shall accurately indicate the year, month, date, venue, name of the chairperson, method of adopting resolutions, gist of the proceeding and the conclusion of the meeting and shall be properly kept throughout the standing of the Company.

(Delete this item)

Article16. The Company shall count the number of shares represented by the requesters and proxies present at the meeting, produce and clearly display at the meeting a statistic statement thereof according to the required form.

For each resolution adopted the publication of which is required by law or which belongs to the TWSE-required material information, the Company shall, within the applicable time limit, transmit it to the MOPS.

Article17. The working staff of the meeting shall each wear an ID tag or badge.

The chairperson may direct the order-maintaining personnel or security guard to maintain the order of the meeting. The order-maintaining personnel or security guard shall each wear a badge or ID tag bearing their designation when performing their functions at the meeting.

The chairperson may stop the shareholder from making statements by using any equipment other than those readily facilitated by the meeting (if any).

If the shareholder ignores the chairperson’s request for him/her to retrain himself/herself from acting in contravention of these Rules at the cost of the proceeding of the meeting, the chairperson may direct the order-maintaining personnel or security guard at the meeting to escort such shareholder out of the venue of the meeting.

Article18. The chairperson may call the meeting to a break as he/she sees fit. In the event of force majeure. the chairperson may suspend the meeting and announce the appropriate date and hour to resume the meeting. In the event that the venue of the shareholders’ meeting is kept from being available for use before the agenda (including extempore motions) is discussed in full, the shareholders’ meeting may adopt the resolution for continuing the meeting elsewhere. The shareholders’ meeting may adopt the resolution pursuant to Article 182 of the Company Act to re-schedule or resume the meeting within five days.

Article19. These Rules and all subsequent amendments shall come into force after being adopted by the shareholders’ meeting.

These Rules were duly established on April 16th,1998 and the first amendment was approved on June 25th,2010. The second amendment was approved on June 24th,2011. The third amendment was approved on June 22th,2012. The fourth amendment was approved on June 19th,2013.
The fifth amendment was approved on June 18th,2014.

The company will set up an audit committee to replace supervisors since the tenth Board of Meeting. The adjustment of supervisors’ regulations will cease to apply till the tenth Board election.

Appendix X

ARTICLES OF INCORPORATION OF

PRESIDENT SECURITIES CORP.

Chapter I General Provisions

Article 1:

This Company is duly incorporated under the provisions set forth Company Law regarding companies limited by shares in the full name of PRESIDENT SECURITIES

CORP. (Hereinafter referred to as the Company).

Article 2:

The Company shall engage in the following business:

H301011, a securities dealer.
H408011, an aid on futures transaction
H401011, a futures dealer
H105011, a trustee

Article 2-1

The scope of business of the Corporation shall be as follows:

To underwriter valuable securities
To buy and sell valuable securities in centralized trading markets as a principal;
To be consigned to buy and sell valuable securities in centralized trading markets;
To buy and sell valuable securities in its own business location;
To be consigned to buy and sell valuable securities in its own business location;
To act as an agent for stock affairs in valuable securities;
To engage in short-buy and margin sales for trading in valuable securities;
To render aid in futures trading;
To be consigned to buy and sell foreign valuable securities;
To engage concurrently in proprietary futures trading.
To engage concurrently in trustee
To be consigned to buy and sell foreign valuable securities;
To Operate securities-related business of foreign exchange and permit by the Central Bank of Republic of China. (Taiwan)
To engage in other securities related businesses as approved by the competent authorities.

Article 2-2:

The Company may, within the scope as permitted by law, render guarantee services to subsidiaries.

Article 3:

The Company is headquartered in Taipei and may have branches duly set in appropriate locations elsewhere as approved by the government.

Article 4:

This article was deleted.

Chapter II Shares

Article 5:

The Company has New Taiwan Dollars Fifteen Billion Only, divided into 1.5 billion shares at Ten New Taiwan Dollars par value for which the board of directors is authorized with full powers to issue in installments.

Article 5-1:

When the Company acts as a shareholder of limited liabilities, the total amount of external investment by the Company is free of the maximum limitation at 40% of the paid-in capital as set forth in Article 13 of the Company Law.

Article 6:

The share certificates hereof shall be duly signed and sealed by three directors, affixed with Company seal and duly authenticated by the competent authorities or their authorized organization before issuance.

The company may be exempted from printing any share certificate or it may either print a single share certificate or a consolidated share certificate for the shares issued. The Company shall appoint a centralized securities custody institution to make recordation of the issue of such shares.

Article 7:

For transfer of the Company’s shares, both the shareholder and the transferee shall jointly apply hereto for transfer procedures and entry into roster of shareholders, provided, that no transfer of shares shall be made within one month prior to a shareholders' regular meeting or fifteen days prior to an extraordinary meeting or within five days prior to allocation of dividend, bonus or other interests.

Article 8:

The share certificates hereof are the registered ones. The shareholders hereof shall have their names and addresses duly registered into roster of shareholders and have their impression cards of registered seals filed herein. The same is required in case of a change. The stock affairs of the Company shall be duly handled according to “Regulations Governing Stock Affairs of Public Offering Companies” promulgated by the competent authorities of the government except as otherwise provided by the laws and securities regulations.

Chapter III Shareholders' meeting

Article 9:

The shareholders' meeting hereof is in regular and extraordinary ones.

The former is called once per annum within six months from closing of each fiscal year.

The latter may be duly called when considering it is necessary.

Article 10:

The notices to a shareholders’ meeting shall be duly served to shareholders in accordance with Company Law or other laws concerned.

Article 11:

Each share hereof is entitled to one voting power. A shareholder who is unavailable to attend a shareholders' meeting may duly issue a power of attorney with the Company provided form with scope of authorized power to appoint a proxy for the meeting. In the event a proxy is authorized by two or more shareholders, the voting power exceeding 3% of the total issued shares shall be discarded.

The aforementioned power of attorney shall be served to the Company five days in advance of the Company. In case of multiple authorization, it shall be taken on the first come first served basis unless the preceding authorization is declared withdrawn.

Article 12:

The following issues are subject to resolutions to be adopted in the shareholders’ meeting:

Establishment and amendment of the Articles of Incorporation.
Election of directors.
Approval of reports worked out by the board of directors and profit allocation of profit and coverage of loss.
Increase, decrease of capital.
Major affairs otherwise and issues as required by the Company.

Unless otherwise provided for in the Company Law, resolutions in the shareholders' meeting shall be adopted by a majority vote in the meeting attended by shareholders representing a majority of the total issued shares.

Chapter IV Directors

Article 13:

The Company has nineteen directors (four independent and fifteen non-independent directors), to be elected by shareholders’ meeting from among the persons with disposing capacity, both having three-year tenure of office and eligible for reelection. The candidates’ qualifications shall live up to requirements of Company Law, Securities and Exchange Law and related regulations.

Directors shall be elected from among the nominees listed in the roster of candidates by adopting candidate nomination system.

The election of independent and non-independent shall be held together but the votes shall be calculated separately.

Article 13-1:

The Company according to Article14-4, Securities and Exchange Law, establish the Audit Committee, composed of the entire number of independent directors.
Audit Committee and among independent directors shall compliance and follow by internal rules in this company and the Government related regulations.

Article 14:

The total registered shares held by all directors shall not be less than specified percentage and the shareholding and auditing shall be subject to requirements promulgated by the competent authorities of the government.

Article 15:

By attendance of two-thirds majority of directors and a majority vote of the attending directors, three~five managing directors shall be elected and, in the same manner, one chairman shall be duly elected. In case of no managing directors, one chairman and one vice chairman shall be elected from among directors in the same manner. The chairman shall chair the shareholders’ meeting, board of directors meeting and board of managing directors meeting internally, and represent the Company externally.

Article 16:

Meetings of the board of directors shall be convened by the chairman of the board of directors. Unless otherwise provided for in the Company Law, the resolutions in the board of directors meeting shall be adopted by a majority vote in the meeting attended by a majority of directors.

The Convene Notice of the meeting of board may serve to the directors by writing, E-mail or facsimile.

In the chairman’s absence, the vice chairman shall act in the place. In absence of both, the chairman shall appoint a managing director to act in place otherwise one managing director shall be elected from among themselves to act in the place. A director unavailable to the meeting may duly authorize another director to attend a board meeting on his behalf.

Article 17:

The board of directors shall have the following functions:

To work out the Company’s business plans;
To work out organizational regulations, major articles and contracts;
To work out budgeting and account closing;
To propose for capital increase, decrease;
To propose profit allocation or loss coverage;
To appoint, discharge managerial officers and key staff;
To resolve establishment and dissolution of a branch;
To resolve major business affairs otherwise;
To exercise other functions endowed by laws and shareholders’ meeting.

Article 17-1:

The Board of Directors may, complying with the law or taking into account the necessity, set up any functional committees whose functions, responsibilities, qualifications of committee members, process of exercising the power and so forth to be formulated by the board of directors.

Article 18:

This article was deleted.

Article 19:

The board of directors is authorized to determine the remuneration for directors taking into account the extent and value of the participation for the management of the Corporation and the standards of the industry. Independent directors receive fixed monthly compensation and shall not participate in the allocation of remuneration to directors and supervisors set forth in Article 23.

Article 19-1

The Company may act as a policyholder of liability insurance for the benefit of directors, supervisors, and managers. The board of directors is authorized to determine the limit of liability and the related matters.

Chapter V Managerial officers

Article 20:

The Company has one president to enforce issues as resolved in the board of directors and take charge of overall business operation of the Company, to be nominated by the chairman and duly appointed and discharged in the board of directors. The Company has a certain number of vice president, be nominated by the president and duly appointed and discharged in the board of directors.

Chapter VI Accounting

Article 21:

The fiscal year hereof is beginning January 1 until December 31 each calendar year.

Article 22:

Upon closing of each fiscal year, the board of directors shall work out the following documents according to Article 228 of the Company Law to be audited by Audit Committee thirty days in advance of shareholders' regular meeting and the Audit Committee shall issue a report accordingly to be approved by the shareholders' meeting:

Business report
Financial statements
Proposals of profit allocation or loss coverage

Article 23:

From the profit earned by the Company upon annual account closing, the sum to pay all taxes and make up previous loss, if any, shall be first withheld, then 10% for legal reserves, 20% as special reserves, set aside or reverse special reserves in accordance with other laws or regulations and together with retained earnings, shall be determined by the shareholders’ meeting and be duly allocated at the following ratios:

Remuneration to directors 3%
Bonus to employees 2%
Bonus to shareholders 95%

The profit may be retained and not allocated if the total allocable profit is not up to 5% of the paid-in capital.

Article 23-1:

The Company takes a policy of dividend payment to maintain sound long-term financial structure and stabilize continual growth to maximize benefits to shareholders, in the following manners:

The total amount of dividend shall not be below 70% of the allocable profit as per the preceding article.
Out of the dividend which can be allocated according to the preceding article, stock dividend shall not be below 50% and cash dividend shall not exceed 50%.
The dividend may be allocated in stock dividend in full when the Company is in major investment or development policies.

Chapter VII Bylaws

Article 24:

The organizational rules and operational rules shall be separately worked out by the board of directors.

Article 25:

Any matters inadequately provided for herein shall be subject to Company Law and managerial regulations concerned.

Article 26:

These Articles were duly established on November 26, 1988 and the first amendment was approved on December 28, 1988; ------------; the twenty fifth amendment on June 18, 2015.

Appendix XI

The Impact of the Stock Dividend Issuance on Business Performance, EPS and Shareholders Return Rate

In accordance with the regulation of Letter No. (91)Tai-Tsai-Zheng-1-002534 issued by the Securities and Futures Commission on 16 April 2002, the Company is not obligated to disclose these information since it did not publish any financial forecasts.

Appendix XII

Shareholdings of Directors

In accordance with Article 26 of the Securities and Exchange Act:

The aggregate minimum shareholding for all directors is 32,000,000 shares.

As of the date of record for the General Shareholder Meeting, i.e., April 16, 2016, the total shareholdings of directors were as follows:


Title	Name	Shares Held	Shares Ratio
Chairman	KAI NAN INVESTMENT CO.,LTD	37,104,849	2.84%
Director	LIN,KUAN-CHEN	3,000,000	0.23%
Director	CHENG, KAO-HUEI	2,615,171	0.20%
Director	LEG HORN INVESTMENT CO.,LTD	11,558,644	0.89%
Director	DUH, BOR-TSANG	3,903,130	0.30%
Director	HUI TUNG INVESTMENT CO.,LTD	9,501,348	0.73%
Director	TA LEH INVESTMENT HOLDING CO.,LTD	6,681,624	0.51%
Director	LEE , SHY-LOU	7,806,955	0.60%
Director	KAO, XIU-LING	3,529,286	0.27%
Director	TENE, WEN- HWI	1,482,995	0.11%
Director	China F.R.P. Corporation	5,023,285	0.39%
Independent Director	WU,TSAI-YI	0	0.00%
Independent Director	LEE, KWANG- CHOU	0	0.00%
Independent Director	FU, KAI- YUN	0	0.00%
Independent Director	Liang, Yann Ping	0	0.00%
TOTAL		92,207,287	7.07%

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